McDonald's legal cases
has been involved in a number of lawsuits and other legal cases in the course of the fast food chain's 70-year history. Many of these have involved trademark issues, most of which involving the "Mc" prefix, but McDonald's has also launched a defamation suit which has been described as "the biggest corporate PR disaster in history".
Partnership suits
El Salvador
In 1996, McDonald's revoked businessman Roberto Bukele's franchise for his restaurants in El Salvador. McDonald's told Bukele the franchise he had operated for 24 years had expired and wouldn't be renewed. Bukele, who had a 1994 agreement that he believed extended the franchise to 2014, refused to close or rebrand his restaurants.McDonald's won in the lower courts, but appellate courts sided with Bukele and eventually in 2012 McDonald's was ordered to pay a $23.9 million judgment to Bukele.
Bukele alleged that he never received the $23.9 million judgment and has filed a new demand in court for $21 million in interest on the award.
McDonald's India – Vikram Bakshi partnership case
On 30 August 2013, McDonald's published a public notice in select newspapers, declaring that McDonald's India partner Vikram Bakshi had ceased to be the managing director of Connaught Plaza Restaurants pursuant to the expiration of his term on July 17, 2013. CPRL was a joint venture between McDonald's and Vikram Bakshi, and was responsible for managing the over 150 McDonald's outlets in North and East regions of India. Bakshi had been the face of the company in India for almost two decades. After being ousted abruptly, Bakshi sought to fight for his stake and rights before the Company Law Board. Bakshi said he brought over worth of revenue for the American food chain. McDonald's sought to buy the 50% share in CPRL held by Bakshi and his wife for, whereas Bakshi sought for the same. Bakshi accused Amit Jatia, who manages the chain in West and South India under Hardcastle Restaurants, of instigating McDonald's. McDonald's had sold their 50% share of the Hardcastle Restaurants joint venture to Jatia at a reported loss of 99% in 2011, making it a master franchisee.The court is under the ambit of CLB with hearing beginning in early October 2013. In 2017, the National Company Law Tribunal reinstated Bakshi as managing director of Connaught Plaza Restaurants. In 2019, Bakshi and McDonald's reached a settlement where McDonald's would buy Bakshi share in CPRL for an undisclosed amount and become the sole owner.
Defamation
McLibel (UK)
In 1990, McDonald's took environmental campaigners Helen Steel and Dave Morris to court after they distributed leaflets entitled What's Wrong with McDonald's? on the streets of London. The high-profile trial, which came to be known as the McLibel Case, lasted nearly ten years, the longest in English legal history.Though a High Court judge eventually ruled in favour of McDonald's on some counts, The Guardian environmental editor John Vidal called it a Pyrrhic victory. The extended legal battle was a PR disaster, with every aspect of the company's working practices being scrutinised and the media presenting the case as a David and Goliath battle. Additionally, the damages received were negligible compared to the company's estimated £10 million legal costs because the court ruled in favour of a number of the defendants' claims, including that McDonald's exploited children in its advertising, was anti-trade union and indirectly exploited and caused suffering to animals. McDonald's was awarded £60,000 damages, which was later reduced to £40,000 by the Court of Appeal. Steel and Morris announced they had no intention of ever paying, and the company later confirmed it would not be pursuing the money. Steel and Morris went on to challenge UK libel laws in the European Court of Human Rights, claiming that the lack of access to legal aid and the heavy burden of proof that lay with them, as the defendants' requirement to prove their claims under UK law was a breach of the right to a fair trial and freedom of expression. The court ruled in their favour.
Intellectual property
MacJoy (Philippines)
In 2004, McDonald's sued Cebu-based fast food restaurant MacJoy for using a very similar trade name. In its defense, MacJoy insisted that it was the first user of the mark under the title "MACJOY & DEVICE" for its business in Cebu City which started in 1987, whereas McDonald's only opened its first outlet in the same city in 1992, although it had used the name in Manila since 1971. MacJoy stated that the requirement of "actual use" in commerce in the Philippines before one may register a trademark pertains to the territorial jurisdiction on a national scale and is not merely confined to a certain locality or region. It added that "MacJoy" is a term of endearment for the owner's niece whose name is Scarlett Yu Carcel. In response, McDonald's claimed that there was no connection with the name Scarlett Yu Carcel to merit the coinage of the word "MacJoy" and that the only logical conclusion over the name is to help the Cebu restaurant ride high on their established reputation.In February 2007, the Philippine Supreme Court upheld the right of McDonald's over its registered and internationally recognized trademarks. As a result, the owners of MacJoy, the Espina family, was forced to change its trademark into MyJoy, which went into effect with the re-opening of its two branches in Cebu City in August that year.
McCoffee (US)
In 1994, McDonald's successfully forced Elizabeth McCaughey of the San Francisco Bay Area to change the trading name of her coffee shop McCoffee, which had operated under that name for 17 years. "This is the moment I surrendered the little 'c' to corporate America," said Ms. McCaughey, who had named it as an adaptation of her surname.Norman McDonald's Country Drive-Inn (US)
From the early 1960s to the mid-1980s, Norman McDonald ran a small "Country Drive-Inn" restaurant in Philpot, Kentucky, called simply "McDonald's Hamburgers; Country Drive-Inn", which at the time also had a gas station and convenience store. McDonald's the restaurant chain tried to get the removal of McDonalds from Norman but Norman fought and won the right to keep his last name on his front sign but had to add the full Norman McDonald's name to its sign so customers would not be confused into thinking the restaurant was affiliated with the McDonald's restaurant chain. The restaurant is still open to this day.McChina Wok Away (UK)
In 2001, McDonald's lost a nine-year legal action against Frank Yuen, owner of McChina Wok Away, a small chain of Chinese takeaway outlets in London. Justice David Neuberger ruled the McChina name would not cause any confusion among customers and that McDonald's had no right to the prefix Mc.McMunchies (UK)
In 1996, McDonald's forced Scottish sandwich shop owner Mary Blair of Fenny Stratford, Buckinghamshire to drop McMunchies as her trading name. Mrs. Blair did not sell burgers or chips. She said she chose the name because she liked the word munchies and wanted the cafe to have a Scottish feel. The cafe's sign reflected this, featuring a Scottish thistle and a St Andrew's flag. But in a statement to Mrs. Blair's solicitors, McDonald's said if someone used the Mc prefix, even unintentionally, they were using something that does not belong to them.MacDonald's (Cayman Islands)
An often reported urban legend maintains that McDonald's filed a lawsuit against MacDonald's Family Restaurant, an actual fast food establishment located in the Cayman Islands. This false claim alleges that McDonald's lost the case, and in addition, was banned from ever opening a McDonald's location in the country. While it is true that no McDonald's locations exist on the island, the reason is not due to any lawsuit against MacDonald's Family Restaurant.McAllan (Denmark)
In 1996, McDonald's lost a legal battle at the Danish Supreme Court to force Allan Pedersen, a hotdog vendor, to drop his shop name McAllan. Pedersen had previously visited Scotland on whisky tasting tours. He named his business after his favorite brand of whisky, MacAllan's, after contacting the distillery to see if they would object. They did not, but McDonald's did. However, the court ruled customers could tell the difference between a one-man vendor and a multi-national chain and ordered McDonald's to pay 40,000 kroner in court costs. The verdict cannot be appealed.McCurry (Malaysia)
In 2001, McDonald's sued a small restaurant named McCurry, a popular eatery serving Indian food in Jalan Ipoh, Kuala Lumpur, Malaysia. McDonald's claimed that the use of the "Mc" prefix infringed its trademark, while the defendant claimed that McCurry stood for Malaysian Chicken Curry.In 2006, McDonald's won an initial judgment in the High Court. The judge ruled that the prefix Mc and the use of colours distinctive of the McDonald's brand could confuse and deceive customers. In April 2009, however, a three-member Appeal Court panel overturned the verdict, saying that there was no evidence to show that McCurry was passing off its own product as that of McDonald's. The Appeals Court also said that McDonald's cannot claim an exclusive right to the "Mc" prefix in the country. McDonald's appealed the decision to the Federal Court, the highest court in Malaysia. In September 2009, the Federal Court upheld the Appeal Court's decision. McDonald's appeal was dismissed with costs, and the company was ordered to pay RM 10,000 to McCurry.
South African trademark law
politics had prevented earlier expansion into South Africa, but as the apartheid regime came to an end in the early 1990s, McDonald's decided to expand there. The company had already recognized South Africa as a potentially significant market and had registered its name as a trademark there in 1968.Under South African law, trademarks cease to be the property of a company if they are not used for a certain amount of time. McDonald's had renewed the 1968 registration several times, but missed a renewal deadline. The registration expired and McDonald's discovered two fast food restaurants in South Africa were trading under the name MacDonalds. Moreover, a businessman had applied to register the McDonald's name.
Multiple lawsuits were filed. The fast food chain was stunned when the court ruled it had lost the rights to its world-famous name in South Africa. However, the company eventually won on appeal.